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TMI Blog2024 (10) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... ficatory of the previous law, retrospective operation thereof may be permitted, the Hon'ble Supreme Court also pointed out that in order for a subsequent order/provision/amendment to be considered as clarificatory of the previous law, the pre-amended law ought to have been vague or ambiguous. It is only when it would be impossible to reasonably interpret a provision unless an amendment is read into it, that the amendment is considered to be a clarification or a declaration of the previous law and therefore applied retrospectively. It was also held that merely because a provision is described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyze the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively. No such difficulty in interpretation or implementation existed vis- -vis the PMLA, 2002 which made the provisions of Section 8(3)(a) impossible to interpret without the amendment made vide Finance Act, 2018. In Memon Abdul Karim Haji Tayab' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Manish Malani (Director) under Section 406, 420, 120(B) of the IPC and Section 3 and 4 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 ( MPID Act ). 3. The case was subsequently transferred to the Economic Offences Wing (EOW), Mumbai Unit which filed a charge sheet on 29/03/2014 in the MPID Court against the arrested accused Shri P.V.R. Murthy. It was alleged that the accused company M/s Birla Power Solutions Ltd., their group entities and their director offered attractive interest on fixed deposits by way of advertisement. Investments to the tune of approximately Rs. 300 to 400 crores were collected from around 100 to 150 companies/persons. As per the charge sheet submitted by the EOW, an amount of Rs 57.04 crore and Rs 214 crores remained unpaid towards Fixed Deposit (FD) and Inter-Corporate Depositors (ICD) respectively. 4. As an offence under Sections 420 and 120-B of the IPC is a scheduled offence under the Prevention of Money Laundering Act, 2002 ( PMLA, 2002 ), the Directorate of Enforcement registered a case vide ECIR/16/MZO/2014 dated 17.01.2014 against M/s Birla Power Solutions Ltd., its Director Shri Yashovardhan Bir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant had raised several grounds therein. It was inter alia contended that the impugned order of the Ld. AA is contrary to the express provisions of the law; the Ld. AA has ignored the definition of 'proceeds of crime' under PMLA, 2002, failed to apply its mind and simply reproduced the allegations made in the PAO and acted as a mere rubber stamp; that the deposits were invited strictly in compliance with the provisions of the Companies Act and all the transactions were regular financial transactions which cannot invite criminal prosecution even if there was any error of judgement in normal course of financial business transactions; that the ingredients of Section 5(1) and Section 8 were not met and no reasonable person could have had the requisite 'reason to believe' under the said provisions; that the ingredients of the alleged offences under the IPC, including cheating and criminal breach of trust were not present and the requisite dishonest/fraudulent intent was absent on the part of the appellant; that the prosecution complaint filed by the Mumbai Police on the basis of which action under PMLA, 2002 were initiated are not likely to sustain as the ingred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implication, especially where the new law is made to cure an acknowledged evil for the benefit of the community as a whole and retrospective operation may be permitted. 11. In the above context, it is pointed out that in the present case, the PAO dated 02.09.2014 was confirmed by the Ld. AA on 19.01.2015. However, the prosecution complaint was filed only on 16.07.2018, i.e., after a delay of more than 3 years from the date of confirmation of the PAO. It is contended that the intention behind the amendment of the PMLA, 2002 was to prevent timeless attachment of the property of the innocent by the hands of the Director to Enforcement . The judgement of the Hon'ble Supreme Court in Vijay Madan Lal Choudhary v. Union of India [2022] 140 taxmann.com 610/2022 SCC online SC 929 is inter alia relied upon for the proposition that attachment made during the course of the investigation cannot be done for a timeless period in the spirit of Section 8(3)(a) of the PMLA, 2002. The Respondent (ED) did not file the prosecution complaint within the stipulated period of 90 days from the date of confirmation by the Ld. Adjudicating Authority and still enjoys the attachment of the said property, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble interpretation, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. If a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended. The amendment would not serve its object in such a situation unless it is construed as retrospective. (iii) Vishnu Thakur v. State of Maharashtra [1994] 4 SCC 602; AIR 1994 SC 2623 - A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective either expressly or by necessary intendment whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature Every litigant has a vested right in substantive law but no such right exists in procedural law A procedural statute should not, generally speaking, be applied retrospective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctorate has contested the averments made on behalf of the appellant. In their written reply to the appeal, the respondents have addressed the issues raised in the grounds of appeal. It is contended that the funds raised from investors were not utilised for the intended purpose and were ultimately used for a cause which was not disclosed to the investors in the advertisement published by the appellant. The fraudulent intention of the appellant is proved from the fact that the funds received from investors were initially diverted to own sister concerns and ultimately to one Shri Madan Diwan and his companies. Out of these funds, Madan Diwan transferred back Rs. 98 crore to Yash Birla group companies. This clearly reveals the fraudulent intention of the appellant. Funds were collected from investors for expansion and filling of gap of working capital of Birla Power Solution Ltd. but the same were never used for the intended purpose and were routed to various companies of their own group and ultimately transferred to Madan Diwan and were finally utilized for Birla Surya Ltd. project which was subsequently abandoned due to adverse market conditions for their products. It was an act of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the merits of the case have been presented before us by the appellant. The case was argued solely on grounds of limitation period for filing of prosecution complaint. Accordingly, while taking note of the submissions made by the respondents which have been summarised in the preceding paragraph, we do not express any view on the rival contentions made on the merits of the alleged money-laundering transactions. 17. Insofar as the issue of limitation period for filing of prosecution complaint u/s 8(3)(a) is concerned, we find that the legal position is as below: Upto 18.04.2018 No time limit 19.04.2018 to 19.03.2019 90 days from the date of Adjudicating Authority's order W.e.f. 20.03.2019 365 days from the date of Adjudicating Authority's order 18. We have taken note of the fact that the relevant amendment to Section 8(1)(a) was made through the Finance Act, 2018. The accompanying 'Notes on Clauses' of the Finance Bill, 2018 reads as below: Clauses 204 and 205 of the Bill seeks to amend certain provisions of the Prevention of Money-laundering Act, 2002, which include the following, namely:- (i) (ii)** ** ** (iii)to amend section 8 of the said Act relating to adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larification or a declaration of the previous law and therefore applied retrospectively. It was also held that merely because a provision is described as a clarification/explanation, the Court is not bound by the said statement in the statute itself, but must proceed to analyze the nature of the amendment and then conclude whether it is in reality a clarificatory or declaratory provision or whether it is a substantive amendment which is intended to change the law and which would apply prospectively. No such difficulty in interpretation or implementation existed vis- -vis the PMLA, 2002 which made the provisions of Section 8(3)(a) impossible to interpret without the amendment made vide Finance Act, 2018. 22. The primary proposition emerging from Zile Singh's case, as per the appellant's own submission is that every statute is presumed to apply prospectively. This presumption can be rebutted not only by the express language of the statute but also by necessary implication, especially in a case where the new law is made to cure an acknowledged evil for the benefit of the community as a whole. In the present case, the necessary implication is to the contrary. It could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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